10 Feb 2015
Further rate cuts expected by the Riksbank – TDS
FXStreet (Edinburgh) - Strategists at TD Securities expect the Riksbank to lower its refi rate to the negative ground for the first time in its meeting on Thursday.
Key Quotes
“We look for a –25bps rate cut from the Riksbank on Thursday, as it pushes its policy rate into negative territory for the first time ever. This puts us on the dovish end of expectations”.
“The issue here is not growth, but putting a floor under sliding inflation expectations. This is what we believe prompted the Riksbank into cutting more aggressively in 2014, and we think should prompt a reaction now”.
“We would target long EURSEK from 9.43 to 9.53 on a 10bps cut or 9.60 if the Riksbank meets our expectation for a 25bps cut. However with Eurogroup and the EU Leaders’ Summit over Wednesday/ Thursday, EUR may see increased volatility”.
Key Quotes
“We look for a –25bps rate cut from the Riksbank on Thursday, as it pushes its policy rate into negative territory for the first time ever. This puts us on the dovish end of expectations”.
“The issue here is not growth, but putting a floor under sliding inflation expectations. This is what we believe prompted the Riksbank into cutting more aggressively in 2014, and we think should prompt a reaction now”.
“We would target long EURSEK from 9.43 to 9.53 on a 10bps cut or 9.60 if the Riksbank meets our expectation for a 25bps cut. However with Eurogroup and the EU Leaders’ Summit over Wednesday/ Thursday, EUR may see increased volatility”.